- The adjusted net profit for 2019 amounted to NIS 21.4 million, compared to the adjusted profit of NIS 20.9 million in 2018.
- TASE's revenues for 2019 amounted to NIS 260 million, compared to NIS 255.6 million in 2018.
- Adjusted EBITDA amounted to NIS 62.9 million in 2019, compared to NIS 61.5 million in the corresponding period last year.
- In 2019, capital raising by companies on the Stock Exchange amounted to NIS 13.3 billion, an increase of 100% over 2018. Issuances of government and corporate bonds amounted to NIS 164.7 billion, an increase of 29% over 2018.
Ittai Ben-Zeev, CEO of the Tel Aviv Stock Exchange, says today: “We are concluding 2019 with growth in operations and services. In 2019, we implemented our strategy of expanding the volume of investments to facilitate a broader variety of services and the development of new infrastructure and products. As a newly listed company, TASE will be, for the first time in the history, distributing a dividend to the investors, allowing the public to partake in the profits of the Tel Aviv Stock Exchange."
Ben-Zeev also addressed the coronavirus and the state of the markets, stating that: “The Tel Aviv Stock Exchange is prepared both operationally and technologically and will maintain regular operations in these troubled times. It is our mission to drive the economic activity in Israel and we are well positioned to continue providing optimal and undisrupted services to both Israeli and international investors. Together, we will lay the groundwork for a healthy economy in the aftermath of the crisis."
Tel Aviv, Israel, March 24, 2020 – The Tel-Aviv Stock Exchange Ltd. (TASE: TASE) today announced its financial results for the fourth quarter ended December 31, 2019 and for 2019. In the third quarter of 2019, TASE closed its offering on the Tel-Aviv Stock Exchange and has operated as a public company since August 1, 2019.
TASE reports its first dividend distribution of NIS 8.77 million, representing NIS 0.0877 per ordinary share. The record date for entitlement to the dividend is April 1, 2020. The dividend will be payable on April 16, 2020.
It should be noted that the comparison of the 2019 results against the corresponding period last year excludes two significant non-recurring components, to ensure comparable adjusted results:
• 2019 - Exclusion of the effect of share-based payment expenses of NIS 3.8 million.
• 2018 - Exclusion of income in respect of the impairment provision previously recorded for the building of the Tel Aviv Stock Exchange, in a gross amount of NIS 85.1 million (or NIS 65.5 million net of tax).
Highlights of the Results:
The revenue in the fourth quarter of 2019 totaled NIS 66.4 million, compared to NIS 70.3 million in the corresponding quarter last year – a 6% decrease. Most of the decrease is due to there being 8% fewer trading days in the fourth quarter of 2019 since most of this year's Jewish Holidays having fallen in the fourth quarter.
TASE's revenues for 2019 amounted to NIS 260 million, compared to NIS 255.6 million in 2018. The increase is due mainly to revenues from listing fees and levies and revenues from data distribution and connectivity services, which were partly offset by a reduction in trading and clearing commissions.
TASE's expenses in the fourth quarter of 2019 totaled NIS 62.5 million, excluding the effect of share-based payment expenses, compared to NIS 60.6 million in the corresponding quarter last year. Most of the increase in the expenses is due to growth in depreciation expenses (among other reasons as a result of applying IFRS 16) and marketing expenses.
Expenses in 2019, excluding the effect of share-based payment expenses, amounted to NIS 242 million, compared to expenses of NIS 227.1 million in the corresponding period last year, excluding the effect of an impairment reversal. Most of the increase in the expenses is due to growth in depreciation expenses, employee benefit expenses and marketing expenses.
The adjusted net profit in the fourth quarter of 2019 totaled NIS 3.2 million, compared to an adjusted net profit of NIS 7 million in the corresponding quarter last year. The decrease in profit is due mainly to a decrease in revenue from services due to the lower number of trading days and an increase in expenses, primarily depreciation and marketing expenses.
The adjusted net profit in 2019 totaled NIS 21.4 million, compared to NIS 20.9 million in 2018. The increase of 3% is due mainly to an increase in revenue from services and financing income, which was partly offset by an increase in depreciation expenses, employee benefit expenses and marketing expenses.
The adjusted EBITDA in the fourth quarter of 2019 totaled NIS 15.1 million, compared to NIS 18.7 million in the corresponding quarter last year. The reduction is due to a decrease in the quarter's revenue.
The adjusted EBITDA in 2019 totaled NIS 62.9 million, compared to NIS 61.5 million in the corresponding period last year. Most of the increase is due to the initial application in 2019 of IFRS 16, the effect of whose application is that the expenses in respect of leases in an amount of NIS 8.7 million are included under depreciation expenses. This was offset by a decrease in employee benefit expenses and marketing expenses.
Significant growth in the liquidity balances – As stated, in August 2019 TASE completed its transition to becoming a public company listed on the Tel-Aviv Stock Exchange. With the closing of the sale offer and the listing of the Company's shares, TASE received its share of the net surplus consideration from the sale process proceeds in an amount of NIS 15.5 million. Additionally, since the listing of TASE until the end of 2019, several shareholders of the Company disposed of shares that they had held prior to the TASE Restructuring Law taking effect and the Company received the surplus consideration of NIS 13.8 million in accordance with the provisions of the Law.
Investments and innovation - TASE continued to implement its strategic plan, with investments of NIS 38 million in 2019, compared to NIS 54 million in 2018. These steps are designated to continue expanding the range of services that are offered by TASE, diversify its revenues and develop technological and other infrastructure in alignment with international standards. Highlights of TASE's investments in 2019: colocation and hosting services on TASE's data center, development of blockchain-based securities lending platform, a dedicated system for registering and clearing alternative investment instruments, pre-offering services for underwriters and issuance coordinators, and establishment of a digital portal for customers of TASE Nominee Company. TASE also added new types of securities to the Stock Exchange in 2019: dual listing of 23 foreign ETFs of BlackRock, dual listing of foreign REITs, listing of R&D partnerships and listing of bonds in kind.
In its financial statements, TASE also addresses the first quarter of 2020, noting that the outbreak of the coronavirus in China in January 2020 and its evolving into a “global pandemic" resulted in uncertainty and strong volatility in the capital markets, which were exacerbated by its effects on global economic activities.
At the publication date of the report, TASE notes that the short-term negative effects of the coronavirus on the operating results of the Company cannot be estimated, as the Company is not directly affected by the prices of the securities, but rather by the trading and clearing turnovers of securities and derivatives, which reached record highs in March 2020.
During this period, TASE has operational and technological solutions in place to facilitate the trading and clearing operations. TASE will continue to operate under all scenarios, with a significantly reduction in the number of employees that are required to be present at the sites of the Company for the operation of the core trading and clearing systems, all in strict compliance with the directives of the Ministry of Health.
The perseverance and exacerbation of this unprecedented global crisis could also adversely affect business and economic operations in Israel and worldwide, including the volumes of the investment and trading in securities, in a manner and to an extent that, at this stage, cannot be estimated and quantified by the Company.
Nevertheless, when the crisis blows over, we will witness a gradual recovery. At this stage, the volumes of trading and capital raising in the recovery period cannot be estimated, as these depend, among others, on the volatility of the markets and the pace at which the public returns to invest, directly or indirectly, in securities that are listed on TASE. However, we are confident that the resilience of the Israeli economy, in general, and of the Israeli capital market, in particular, will prevail.
Click here for the link to the financial statements of the fourth quarter and full year 2019 >
Click here for the link to the financial presentation of the fourth quarter and full year 2019 >
Click here for the TASE Conference Call Recording - Financial Report 4Q and full year 2019>
This announcement is not a substitute for perusing the Company's interim financial statements for the fourth quarter and full year 2019, in which full and precise information is presented.
